Breaking News

Up to 200,000 people estimated to travel to Vermont for total solar eclipse How fast will April’s total solar eclipse travel? The UN Security Council demands a ceasefire in Gaza during Ramadan Mexico in the emerging world order Pennsylvania State Guard Organizes Lithuanian Foreign Minister US Abstention from UN Security Council Resolution on Gaza – US State Department USA beats Mexico 2-0 thanks to goals from Adams and Reyna to win 3rd consecutive CONCACAF Nations League Mexico x United States | Highlights Meaning | The Case for American Intervention in Haiti Julian Assange to hear results of key US extradition ruling

A large body of economics literature shows that workers suffer large and persistent earnings losses after job displacement. With millions of workers displaced during the COVID-19 recession and high income inequality in the United States, it is important to understand the role that job displacement can play in driving inequalities between demographic and socioeconomic groups. In this paper, we use the Panel Study of Income Dynamics (PSID) to measure the incidence and impact of job relocation on income by race, education, and parental income level. If we focus on displacements that occurred between 1989 and 2019, we find that black workers are, on average, 67 percent more likely to be displaced than their white counterparts. Workers without a bachelor’s degree are also 67 percent more likely to be fired than those with a bachelor’s degree, and workers whose parents are in the bottom half of the income distribution are 27 percent more likely to be displaced than those with parents in the top half. Using a fixed effects model from an event study, we measure the impact of a given crowding out on annual income by worker group. We find similarly large and persistent negative income impacts across all demographic and socioeconomic groups. Overall, we’re projecting a 57 percent earnings decline for the year after crowding out and a 25 percent decline in the tenth year after crowding out.

Click here to read the full report.

Kristin Butcher is Vice President and Director of Microeconomic Research at the Federal Reserve Bank of Chicago. The views expressed are those of the authors and do not necessarily represent the views of the Federal Reserve Bank of Chicago, the Board of Governors of the Federal Reserve System, or their employees.

The Brookings Institution is funded through support from a variety of foundations, corporations, governments, individuals, and one endowment. A list of donors can be found in our annual reports published online. The findings, interpretations and conclusions in this report are solely those of the authors and are not influenced by donations.

Leave a Reply

Your email address will not be published. Required fields are marked *